Investments in midstream assets have paid off for the region’s oil and gas producers.
Oil and gas companies have poured billions of dollars into developing the Permian Basin over the last several years. In addition to buying land and drilling more wells, many have invested in building out the necessary midstream infrastructure to move their growing production out of the region. That infrastructure investment has proven to be a smart one, as an increasing number of drillers are cashing in on these assets by selling them to private equity funds or midstream-focused companies for a significant premium to their initial investment.
Concho Resources (NYSE:CXO) and WPX Energy (NYSE:WPX) are the latest to cash in on a midstream investment; they both recently sold their stake in Oryx Midstream to private equity fund Stonepeak Infrastructure Partners. These sales highlight the value oil and gas producers are creating by investing in early-stage midstream developments.
Ringing the register
Stonepeak Infrastructure Partners is buying Oryx Midstream from drillers Concho Resources and WPX Energy as well as private equity funds Quantum Energy Partners and Post Oak Energy Capital for $3.6 billion. Oryx operates oil gathering and transportation systems that move crude from wells in the Delaware Basin to longer-haul pipelines that take it out of the region. Read more…